Govt asks DERC not to go for populist measures

Amid its ongoing tussle over fixing new power tariff with the DERC, Delhi Government today said the regulator should not go for "populist" measures and must consider the overall reform process in the sector while finalising new rates.

A top official in the Chief Minister's office, indicating a hard stand on the issue, said government would not allow the Delhi Electricity Regulatory Commission to announce the new tariff order if it failed to address genuine grievances of distribution companies.

Sticking to its position of favouring a cut down in power tariff for 2010-11, the DERC on Friday had shot off letters to all three private discoms charging them of misleading the government by submitting inaccurate facts while demanding a tariff hike.

Picking hole in DERC's calculation in preparing the new tariff order, the official, who wished not to be named, said the regulator finalised the tariff structure on the basis of discoms' audited accounts for the year 2008-09.

"The DERC has not taken into consideration the audit report of the three discoms for 2009-10. The discoms bought power at a very high rate last summer and if that cost is not adjusted now then people will have to be burdened with a very hefty hike next year as the interest component will also have to added," he said.

The official said "DERC will not be allowed to take decisions arbitrarily."

The tussle between the DERC and the government began after the power department, exercising a special power under the Delhi Electricity Act, had directed the regulator on May 4 not to announce new tariff structure and asked it to submit a report on the entire issue.

The government move had come after the discoms submitted a representation to the government requesting it to direct the DERC to hike the tariff.

The DERC after receiving the government directive had indicated that it had planned to cut down the tariff by 20 to 25 per cent as discoms would have a surplus of around Rs 4,000 crore if the existing tariff was not tinkered with.

The regulator had also sent a letter to the Government yesterday strongly objecting to any tariff hike.